Correlation Between Rugby Mining and China Gold
Can any of the company-specific risk be diversified away by investing in both Rugby Mining and China Gold at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Rugby Mining and China Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rugby Mining Limited and China Gold International, you can compare the effects of market volatilities on Rugby Mining and China Gold and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Rugby Mining with a short position of China Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rugby Mining and China Gold.
Diversification Opportunities for Rugby Mining and China Gold
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Rugby and China is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Rugby Mining Limited and China Gold International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Gold International and Rugby Mining is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Rugby Mining Limited are associated (or correlated) with China Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Gold International has no effect on the direction of Rugby Mining i.e., Rugby Mining and China Gold go up and down completely randomly.
Pair Corralation between Rugby Mining and China Gold
Assuming the 90 days horizon Rugby Mining Limited is expected to under-perform the China Gold. In addition to that, Rugby Mining is 2.71 times more volatile than China Gold International. It trades about -0.08 of its total potential returns per unit of risk. China Gold International is currently generating about 0.06 per unit of volatility. If you would invest 622.00 in China Gold International on September 26, 2024 and sell it today you would earn a total of 72.00 from holding China Gold International or generate 11.58% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Rugby Mining Limited vs. China Gold International
Performance |
Timeline |
Rugby Mining Limited |
China Gold International |
Rugby Mining and China Gold Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Rugby Mining and China Gold
The main advantage of trading using opposite Rugby Mining and China Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rugby Mining position performs unexpectedly, China Gold can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in China Gold will offset losses from the drop in China Gold's long position.Rugby Mining vs. PJX Resources | Rugby Mining vs. Plata Latina Minerals | Rugby Mining vs. Rathdowney Resources | Rugby Mining vs. Rackla Metals |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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